Neuchatel, December 9, 2015 - Illegal mining with its related symptoms of ecological, social and economic impacts amongst others continues to be a challenge in many areas of South America.

Governments in Peru, Colombia, Ecuador, Bolivia or Chile have started some years ago to take measures, implement formalization process’s and crack down on illegal mining in order to tackle this historical problem. Despite these ongoing efforts, results are still modest.

Peru however took the decision in 2014 to push the process further. In order to encourage the formalization process of concerned artisanal and small scale gold miners, the government of Peru, through the government controlled company, Activos Mineros SAC, launched Public Tenders to selected trading companies (“comercializadoras”) in the different mining regions of the country. The selected trading companies would in turn commit to offer favorable and fair terms to the artisanal and small scale miners already in the process of formalization. By offering limited discounts versus the international gold price, such local mining communities would be able to receive competitive returns in comparison to the ones offered by illegal traders, while continuing to push forward their formalization and improvement processes.

This process requires that artisanal and small scale miners are fully identified, the concession from which the gold is mined duly registered as well as obtaining a tax identification number and being registered with the Ministry of Mines and Energy. This process permits to bring such activity into the regular and formal economic channels and to improve the traceability of the mineral. At the same time contributing to achieving a fair compensation for their activity and price for the mineral extracted.

This initiative has been a success in the Altiplano Region, and in particular in the area of Puno. In this Region the Public Tender was awarded in May 2014 to a Peruvian company Minerales del Sur SAC. In cooperation with Metalor, Minerales del Sur SAC was in the position to offer very competitive terms to support the formalization process in their attributed region. As a result, clear reporting and verification of supply chain of minerals to the controlling entities, SUNAT, Peruvian customs, has been implemented.

During a recent fact-finding trip to Peru, Metalor, in collaboration with our local country manager, had the opportunity to verify directly the processes in place during meetings with high officials of Activos Mineros SAC, the tax and customs authorities (SUNAT) and the Ministry of Energy and Mines. Metalor role was commented with satisfaction. Local Swiss authorities facilitated and participated in certain of the meetings as well.

The company is committed to continue to support the formalization process of the gold mining industry in Peru and is proud of its participation in this initiative.